Is Nissan about to pull Infiniti out of Europe? It’s a good question, asked, reflectively and of the automaker, this week by our new and future products editor Glenn Brooks. As he said: “December will be Infiniti Europe’s 10th birthday – will there be much to celebrate? As sales plunge at a dizzying rate across Europe and new model launches are pushed back, the question has to be asked: is Nissan planning to pull the plug on its luxury brand in the world’s toughest market?”
There have been other casualties. Lexus, aimed primarily at the US when launched in 1989, has done passably well here in the UK but always struggled to achieve its European potential, with a smaller model line, limited powerplant choice and none of the have-your-car-built-to-order flexibility that ensures hardly any Mercedes, Audi or BMW that leaves a UK or European showroom is cookie-cutter identical. Mazda’s Eunos, remember that? And how many Cadillac Europe (re)launches have you counted to date? Even ‘native’ Saab has long been gone. Britain’s Rover? History. Etc.
Go deeper with GlobalData
Infiniti whose cars, in my very limited experience of ’em, are well enough styled, specified, engineered and built, has hung in there, despite not really gaining any traction in Europe, or much more elsewhere.
Opines our Mr Brooks: “Europe is an exceedingly tricky place for any non-German luxury automotive brand. Just look at Jaguar’s performance in Germany, DS registrations anywhere but France, or Alfa Romeo outside of Italy. The numbers speak for themselves. The UK though, can be an exception to this general rule: Audi became big here long before the same thing happened in other European countries and British buyers quickly accepted Volvo’s pricing leap on the second generation XC90 even as Swedes were taking their time.”
“Only 69 Infinitis were sold in Britain last month. And just 35 in Italy. Compared to 45 Ferraris.”
“Lexus has always found a good level of acceptance in the UK, even when self-charging petrol hybrids were a strange curiosity in a market that demanded diesel. There is still no such thing as a Lexus PHEV and the few diesel derivatives which eventually came to be offered didn’t last long and were not replaced. A compression ignition engine bought in from BMW might have been fine for several of Toyota Motor Europe’s British built cars but would have been unthinkable for Lexus.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“The failure of Nissan’s luxury brand in the European region is a strange thing. The cars were initially nothing remarkable, the model names confusing and the dealer network patchy in its geographic reach. Then Infiniti really got its act together, or rather Nissan allowed it to have some proper money and related resources.”
It’s an interesting read and it’s clear from Infiniti’s response they are not yet throwing in the towel. It’d be churlish not to wish them good luck.
Our resident product guru was also the author of another very popular analysis article looking at Fiat Chrysler’s future plans and models. Another series of brands to which I have had very limited exposure but thoroughly enjoyed a recent quick pedal in a fully loaded, diesel version of the newly launched, UK-spec Jeep Compass SUV (our Cat Dow recently scrutinised this model’s connectivity and infotainment for our new Hands-On Tech series).
On FCA, we said: “Jeep and Ram (news of a new RHD model for Australasia this week BTW), two brands which are successful mainly in the US, are expected to account for most of the future profitability of Fiat Chrysler Automobiles at a global level over the next five years. This is a company which has had to think of the implications for shareholders and its overall indebtedness every time major spending decisions were under consideration. Which is why CFO Richard Palmer has had the hardest job of all senior executives within the company. Getting rid of the last of the firm’s net debt will be a big psychological victory for both the FCA US and FCA Italy parts of the conglomerate. This should also do wonders for corporate self-confidence. Best of all, FCA will hopefully cease feeling the need to pander to the whims of those who can be false friends. Cash-rich rivals such as Toyota, Volkswagen, Renault-Nissan, General Motors and HMG serve those who speculate on their shares less slavishly.”
One to keep an eye on; given the competitive build quality and specification of that Compass, and the satisfaction of a colleague with her newly-acquired (second-in-a-row) Fiat 500, there’s not much wrong with the products.
A JLR tale from Our Man in Brazil was another read popular with our subscribers this week. With not a little interest in the fortunes of ‘one of ours’ (I toil within 45 minutes of most of JLR’s UK facilities), we have tracked the automaker’s progress building the Range Rover Evoque and Land Rover Discovery Sport since before the Brazilian assembly plant project even was announced officially. The automaker’s current position in this market is: despite production volumes way short of expectations, it has no plans to close the factory. But the numbers so far must furrow accountants’ brows: last year saw the domestic market crisis peak after new vehicle sales had slumped almost 50% between 2013 and 2016. JLR built capacity for 24,000 units per year but, by 2017, the factory had barely achieved 5,000 vehicles annually, with local output complemented by imports of other models from the UK. As our Fernando Calmon reported, JLR president for Latin America and the Caribbean, Frederic Drouin, seasoned by a decade in Brazil, including running the Peugeot unit there, has ruled out closure.
In an interview, Drouin said he remained confident. “I tell you, if you do not trust Brazil, you should leave at once, because one always must trust in his country and never lose faith in it. If you look back, you know that you have always been told that Brazil is the country of the future, then the country of the present for a while and some years ago it turned into the country of the past. We hope that it will again become the country of the future and the present. It will all depend on the political scenario. Brazil has everything to become successful.”
He recalled the decision to build the factory was based on much higher annual industry sales. At the time, the premium market in Brazil was good for about 60,000 cars a year and this was expected quickly to top 100,000 units, thus justifying the factory. Instead, in 2017, the market shrank to just 45,000. A challenge ahead, methinks.
Meanwhile, our US analyst Bill Cawthon deep-dived the May light vehicle sales data (remember GM is no longer reporting monthly but that doesn’t seem to have fazed industry watchers over there). “While April showers may have had little influence, an extra selling day and a holiday weekend definitely helped US light vehicle sales to bloom in May. Total estimated turnover reached nearly 1.6m last month, a 4.7% gain over May 2017. After five months, industry volume hit about 7.07m units, up 1.2% from last year.”
A good start to summer selling season then.
Have a nice weekend.
Graeme Roberts, Deputy Editor, just-auto.com
Related Company Profiles
DS Co., Ltd.
General Motors Co
FCA SP Zoo
Volkswagen AG
Cadillac